What if You Lowballed Yourself? #SalaryNegotiation
What if you took the job without asking for more? What if you find out only later that you’re getting paid under-market rate? I’ve done this a few times early in my career. In this episode, I share my own experience, insights into shifting your mindset, and concrete strategies and script for renegotiating your pay by articulating your value with confidence and framing for mutual benefit. Please register for next week’s free webinar (9/12/18, 12pm EST) here: www.jamieleecoach.com
Full Episode Transcript
Hello! Welcome to Episode 34 of Born to Thrive with Jamie Lee. I’m your host and coach, Jamie Lee.
My mission is to help ambitious people like you become bolder, braver, and better paid. And in service of that, I talk about negotiation skills in the context of leadership skills because I believe that when you lead, when you influence, when you negotiate, you thrive, which is exactly what you’re born to do.
Yeah, I believe that.
Tonight, I will be leading a negotiation workshop for the Association of Corporate Councils. This is really interesting. This is kind of funny to me because the event is called “The Power of the Purse: Negotiating as a Woman,” which I love.
And the phrase “power of the purse” reminds me of my mother who came to America as an immigrant around the age that I am now with three little girls in tow and she, while speaking English a little bit worse than Margaret Cho’s mother - Margaret Cho is an Asian-American comedian who does a hilarious imitation of her mother’s broken English, and literally my mother speaks English a little bit worse than that - and yet, she ran her own business.
As a single mother.
As an immigrant.
She worked intensely with an iron-clad work ethic and she managed to put all of us girls through college. She did it single-handedly and it’s still, every time I mention it, it’s like woah. How’d she do that? She did it. She used the power of her purse.
It’s funny to me because, when I was growing up, I realized my mother really valued her purses. She loved, I should say she still loves, her Louis Vitton bag and it’s very valuable to her. I remember being a judgmental teenager and saying, “Mom, why would you do that? Why would you spend hundreds of dollars on a purse? Don’t you want to go on a vacation?” She valued that purse over vacations because that’s how important it was for her, and it’s symbolizes her work ethic, her dedication to excellence, and I’m sure other things.
But when I think of the phrase “power of the purse” I think about my mother and how much she worked, how much she showed me the power of being diligent, believing in ourselves and setting a really powerful example of what is possible for women, for mothers, for immigrants.
And the second part of this event, the second part of the title, is “Negotiating as a Woman,” and I love that. When you read all these articles online you could get the impression that negotiating as a woman is something to be overcome, not to be celebrated.
I am of the opinion that who you are, however you define yourself, as a woman, as a she, as a he, as a they, it is to be celebrated. And it is an asset that brings value because of who you are uniquely in this world. You bring a different perspective, a valuable, a unique perspective to the conversations, to the negotiations that you partake in.
So, that said, I want to talk to you briefly about what to do if you’ve lowballed yourself. What if you didn’t negotiation your salary before accepting a job because you needed to pay the bills, because you needed a job, whatever? You didn’t even realize you were lowballing yourself until later you see that your salary is below market value.
I’ve done this a few times in my career. I’ve had about ten different jobs before I settled on becoming a coach and speaker and I’ve done this a few times. So, I want to offer some strategies today on how to address this.
And the first, the most important thing, is to understand our mindset around this. Now, when we use this phrase “lowball your salary,” what does it make you feel? What are the thoughts that are associated with that? Do you feel that you lost the negotiation by forfeit? That you left money on the table and gosh darn it, you screwed yourself?
Now, nobody wants to be a loser. Especially in our culture that loves to herald winning and success. Negotiating for yourself, negotiating for money can feel like a really precarious walk on that very fine line between failing and losing, winning and succeeding.
And so no wonder so many of us are reluctant and so many of us are anxious to negotiate because we don’t want to fail. If you want to stay safe from failure, it’s tempting to not take action, it’s tempting to not assume any risk, it’s tempting to not risk.
And so the first thing I want to suggest, if you have the thought that you’ve lowballed yourself, is to get clear on your thinking. If you’ve been listening to my podcast for awhile, you would know that my philosophy around this is that your thinking is extremely powerful and your thinking generates the results that you see in your negotiation, in your leadership, in your career, in your life.
So, if you have the thought that you lost, I want to challenge you to reframe that thinking. Get curious about yourself. Why did you do what you did? Why did you not pause to consider whether this was going to be a good offer for you, that this is going to be a good fit?
Is it possible that you had the thought that, “Oh my goodness, if I don’t take this job, I’ll never get another job”? “If I don’t take this job, that means that I would be a failure.”
Also, when I get still and ask myself, okay, why did I do what I did back then, early in my career, take these offers without negotiating for more, I see that I almost unconsciously had this thought that I don’t deserve a great job like this. And before somebody finds out, I’m just gonna take it so that they can’t take it away.
And the emotion that this thought had created in me was fear, anxiety. And from that place of fear and anxiety I just impulsively accepted the offer and the result I had from taking this action was that I had more feelings of unworthiness because then now I realized oh, I didn’t negotiate my salary so I’m a terrible negotiator, I screwed myself and so this thought that I don’t deserve it creates the kind of results that support the thought that I don’t deserve it.
It’s a cycle.
It supports itself.
I want to offer to you, if you can relate to that kind of thinking pattern, I want to offer to you that, no matter the circumstances, no matter how much money you’re making or not making, no matter what your job is, you are enough.
Because you are. You exist. You exist and therefore you are enough. Period. You’re breathing. You’re existing. It means that you are here for a reason. You were created and you are enough. It’s not a matter of deserving or undeserving or being a winner or a loser. You are enough. You are okay. Period.
And from there, it takes work, it takes consistent effort to generate new thinking that will help you, that will empower you to renegotiate your salary. Because everything is negotiable. Your job description. Your compensation. How you do your job. Who you do it with. It’s all negotiable. I believe that.
And so, what is the thinking that will help you?
For me, I see that I needed to recognize my own value. I had to own and believe that I add value as a contributor at this organization.
When you think about it, of course you do! Because otherwise, why would they have hired you? Why would they have invested thousands of dollars in the recruitment process, in the interview process. Thousands of dollars, many hours of several people to recruit you, to tell you about the job, to sell you on the job and then to make you this offer, a lot of time, money, effort was invested to get you there because the employer can see that you will add value and that having you in this job, in this company, creates more value than if they had not hired you.
Companies hire you to see a return on investment because they recognize that having a person in this role that you’re in right now creates a multiple of value compared to the money that they’re paying you.
So own it!
You are there because you add value.
You bring value to the table.
And when you can believe that, I think it will help you feel confident and brave. And from this confident and brave place, I want to encourage you to initiate a negotiation or to renegotiate. And in the process of negotiating for a different compensation package or additional perks or benefits, whatever it would take to help you feel that you’re being compensated fairly, you want to demonstrate, you want to articulate, and you want to advocate for the value you bring.
You want to demonstrate that you have brought value in the past, whether that means at past jobs or within the past couple of months or a year, however long you’ve been with this company. You want to show them that you have brought value and you want to articulate what it is that you help them do because a lot of employers, especially busy managers, they don’t realize how much value you’re adding.
Are you helping to resolve problems, to bring in more revenue, to create technical solutions, to bring innovative solutions? Are you helping to solve problems and save money? However it is that you’re adding value, you want to articulate it.
And you want to also advocate for the future value you will add. And I want to stress that because when you go to renegotiate your compensation, a key strategy there would be to show that you have outgrown the job description that you were originally hired to do. The scope of work has increased and therefore the compensation will also increase. Makes sense, right?
I have a client who is a purpose-driven leader in her company and she is really driven by her values of creating positive change in the world. And so the pay is secondary. For her, doing that purpose-driven job is so much more meaningful than money but at the same time, she was getting paid at a level that was below her actual job description.
Even her manager, when he found out that she was at grade x and not grade x+1, he was surprised. He said, “Oh, I thought, you should already be at pay grade x+1. We should really address that.” So, for her, having that ally, her manager, who recognizes her value and agrees that she should be paid at a higher pay grade is definitely beneficial.
And so if you don’t have that ally, go create one.
Demonstrate your value. Articulate your value. Advocate for the value that you are bringing and help your ally see that you would be best served by being at a higher pay grade level because when you are being compensated at a level that is commensurate with the contributions that you bring, not only will you be happier, not only will you be more motivated, but the employer would benefit as well from having retained an engaged employee.
I hear this statistic all the time, I don’t know how true it is, but only 20% or 30% of employees are actually engaged, so if you are engaged, if you are motivated to do good work and to contribute more value, it is a win-win solution for you to be compensated at market rate.
So, having said that, what else should you be curious about? We just talked about getting curious about your own thinking, how to pivot your thinking or to reframe your thinking to see this negotiation as a win-win solution. Also, you want to be curious about the employer.
Why do they do the thing that they do? Why do they offer this below market-rate salary? Now, it’s really tempting to start going into judgment and blame and thinking, “Oh, they don’t deserve me, they don’t value me, blah blah blah blah blah,” right? But that doesn’t help you negotiate in a way that creates connection, understanding, a better reputation, a better relationship.
Just, really get curious without the judgment. What were they thinking? Maybe they didn’t realize how much leadership potential you have.
I coached a client, and she works in the software industry, and what she really wanted was to be a technical solution architect but she didn’t know how to articulate it. She got an offer, she kind of thought, “It’s okay but what would really make this offer great was if it was $15,000 higher and I had a bigger scope of role because I want to grow into that.” And so I coached her and she told them what she wanted.
She said, “I want to grow as a leader. I want to be a technical solution architect because I have these skills and I know that these skills and experiences will benefit both the employer, both you, and our clients.” And the potential employer, when they heard this, they were really happy. They were excited to hear that she wanted to grow as a leader because they hadn’t thought of it. They didn’t realize that that’s what she wanted and so when she said that’s what she wanted they increased the salary offer by $15,000. They gave her a bigger title, Technical Solution Architect, and my client was really happy. So, it’s possible that when your employer gave you the offer that they had, they hadn’t realized that you had this leadership potential, that you could be doing more, that you could be contributing more, that you do want to do this. Because you hadn’t told them!
It’s not too late, if this is the case. Let them know what you’re capable of. Let them know what you want to grow into. Articulate your future potential.
And also another thing to consider is, okay, beyond what I want, beyond what they want and what is possible, are there hidden constraints?
I have done some operations consulting work for tech startups here in New York and sometimes there is cash crunch with these tech companies because for them, demonstrating the value, demonstrating their value proposition is a higher priority than making a profit. And so they invest a lot of money into hiring the best people, into growing their company, but the top-line growth is not there, so there’s no profit. They’re funding the company with investors’ money and sometimes they use up more of the investor money than they can earn and so there can be a cash crunch.
So is there a cash crunch at your company? Are they going to be strapped for money? And if that is the reason why they can’t afford to pay you the going market rate, how can you help address that concern? Can you help them create more revenue at a faster pace? Can you help the company save more money? And if this is the case, could you consider equity compensation? Could you consider other types of compensation? Could you consider a flexible work schedule? So, this is where creative solutions come into play.
And finally, I want to offer just a few concrete strategies before wrapping this up. First is asking for an accelerated performance review schedule. Usually companies do performance reviews, salary adjustments once a year but if you feel that the salary you’re getting is not commensurate with the level of your contributions then maybe you can ask them to do a 6-month review or even a quarterly review.
Say, “Hey, you know, I’d really like to do this because I really feel strongly that the value I’m bringing is beyond the scope of role that I was hired to do, so it would really help me be up front with you and also maybe revisit the compensation structure because I’m invested in the long-term growth of this company.” I think it’s really important to underline how both your interests and the other side’s interests are in alignment.
And of course, the second thing you can do if you feel you’re undervalued is get another offer. Get a competing offer. This is a lot of work and also you don’t want to do that unless you are 100% ready to take that other job if you cannot renegotiate a higher salary with your current employer. But sometimes having that best alternative to a negotiated agreement really helps and it can also create a very clear, absolutely clear signal that your market value is higher than what you’re getting paid now. So this is kind of a last resort, but also a very powerful option that you have.
And finally, the third strategy is use this as a learning opportunity. Every negotiation, every conversation is a learning opportunity. And what have you learned from having so-called lowballed yourself, having accepted a job without negotiating for more?
Perhaps you have learned that you really want to negotiate for more. You really do want to articulate, to demonstrate and advocate for your value and ask for more because getting paid fairly, getting paid the high end of the going market range makes you feel so much better about doing an awesome job. And when you do an awesome job, you do a more awesome job and the employer benefits from your awesome job and their clients benefit from you doing the awesome job, so it’s a win-win-win solution.
So, the three strategies, I just want to reiterate: First, you can ask for an accelerated performance review. Number two, you can consider the ultimate last resort which is to get another offer to signal to your current employer that you really need to have a market rate adjustment, otherwise you will walk. And only do this if you are 100% ready to walk and take that other job. And third, use this as a learning opportunity.
So, I hope this podcast was helpful and I want to let you know that next week I will be doing a webinar, a free webinar, on the seven core elements of negotiation framework. What that means is I’m going to walk you through the seven steps of the at-the-table strategies. At the negotiation, what are the seven key things that you want to see happen? So if you do want to renegotiate your salary, how should you set the stage? What happens at that conversation? I’m going to walk you through the steps and explain how this framework applies to both salary as well as everyday workplace negotiation situations.
Please register at jamieleecoach.com and I look forward to seeing you there and I hope you have a wonderful week. Talk to you soon!